Maybe you’re moving in with your other half, or maybe you can afford to get a new place without selling the old one. Whatever the reason, letting out your flat can be a great way to boost your income, but there are a few things worth knowing before you take the plunge and become a Landlord.
1. You might need your freeholder’s permission
If your flat is leasehold, then renting it out is a kind of sub-letting, and many leases require you to get the freeholder’s blessing. In practice, they’re unlikely to have any objection, but they might take the opportunity to charge a stiff administration fee.
Simply not telling them is hugely risky. If there’s a fire and you’re found to have been sub-letting on the sly then your insurer could refuse to pay out.
2. There will be some up-front costs
There are various bits of paper you need before you can rent out a flat, including a mandatory gas safety certificate and a current EPC (energy performance certificate). Your flat may already have one of these, so it’s worth checking on www.epcregister.com
Other expenses might include electrical safety tests, redecoration, or a professional deep clean. These costs will vary depending on the size of the flat.
3. There are new fire safety rules
You’ll need at least one smoke alarm on every floor, and a carbon monoxide detector in every room where there’s a solid fuel appliance. Any alarms have to be tested at the start of each new tenancy, and you need to be able to provide proof of this.
It’s also worth thinking about providing fire blankets or extinguishers. Your tenants will be paying you a lot of money, and you shouldn’t be mean about investing in their safety.
4. Consider using an agent
Agents can be expensive, and some aren’t always as straight up as you might hope, but they usually know what they’re doing. Before you decide to save money by going it alone, ask yourself a few honest questions:
How will you find tenants and ensure you’re getting the right rental price? How will you carry out background checks? How will you handle contracts and deposits? What will you do if the tenants don’t pay their rent? And do you really want to be on the end of the phone when a pipe breaks at 3am?
5. You might not get as much as you think you will
Every property is different, and just because your mates round the corner were paying £XXX for a place like yours, it doesn’t mean you’ll achieve the same. Likewise, when agents give you an estimate, it’s often the rent they’ll try for, not what they’ll actually get. There can be a bit of negotiation.
Before you can pocket the cash, there will be deductions for management fees, maintenance costs, service charges, tax and potential mortgage payments, so while letting out your flat can still be very profitable, it’s worth being realistic about your expectations.